John Boehner talks tax cuts

REP. BOEHNER: The only way we're going to get our economy going again and solve our budget problems is to get the economy moving, get more people back to work where they can care for their own families and begin to expand the tax rolls to bring more revenue to the federal government. And what we have to do is we have to get our arms around the spending spree that's going on in Washington, D.C.

MR. GREGORY: But Leader Boehner...

REP. BOEHNER: That's the only way we solve the budget problems.

MR. GREGORY: ... I'm sorry, you're -- that -- you're not, you're not being responsive to a specific point, which is how can you be for cutting the deficit and also cutting taxes, as well, when they're not paid for?

REP. BOEHNER: Listen, you can't raise taxes in the middle of a weak economy without risking the double-dip in this recession. President Obama's favorite Republican economist, Mark Zandi, came out several weeks ago and made it clear that raising taxes at this point in, in the economy is a very bad idea.

MR. GREGORY: But do you agree that tax cuts cannot be paid for...

REP. BOEHNER: You cannot balance the budget without a...

MR. GREGORY: But tax cuts are not paid for, is that correct?

REP. BOEHNER: I am not for raising taxes on the American people in a soft economy.

MR. GREGORY: That's not the question, Leader Boehner. The question...

REP. BOEHNER: And the people that the president wants to tax...

MR. GREGORY: ...is, are tax cuts paid for or not?

REP. BOEHNER: Listen, what you're trying to do is get into this Washington game and their funny accounting over there. You cannot get the economy going again by raising taxes on those people who we expect to create jobs in America and to get the economy going again. If we want to solve the budget problem, we've got to have a healthy economy and we have to get our arms around the runaway spending that's going on in Washington, D.C.

MR. GREGORY: I just want to clarify this. I mean, if you -- I'm relying on what Chairman Greenspan said. Maybe -- if you're accusing him of funny Washington games. He says that tax cuts that aren't paid for are not -- they are not cutting the deficit, that they are not actually paid for, it's borrowed money. And so do you believe tax cuts pay for themselves or not?

REP. BOEHNER: I do believe that we've got to get more money in the hands of small businesses and American families to get our economy going again, and the only way to get that economy going again is to do that and to get our arms around the spending.

He knows EXACTLY what is being asked of him, and he STEADFASTLY refuses to tell the truth, because his goal isn't to speak truth -- it is to trick the other 99% of us to do the bidding of the very rich.

I read a interesting counter argument to this constant "lower tax to make the market go up b.s." on a site called the daily crux, the gist of it is simple; in the decade of the 1950s the highest tax rate was 91% and the market went up 245%, compare that to the 1st decade of this century and we had under bush the lowest taxes in 60 years YET the market went DOWN 36%
I think that the fact that the rich have gotten a whole lot richer and the rest have barely treaded water; I don't buy into that and certainly not for the top 2%.
IMHO

Boehner has been playing too much golf, the sun is getting to him. The federal spending fetish of the GOP blinds them to the counter-cyclical measures taken by state governments to balance their individual budgets.

Obsessing about federal spending during the worst recession since the Great Depression is like worrying about water damage when your house is on fire. Or, just a replay of 1937, when FDR bowed to pressure from conservative deficit hawks and cut back aggressive federal spending, thus the "double dip."

We can't cut our way to prosperity or growth, look at Spain. Today, Fed interest rates are less than 2%. We need not fear future inflation adjusted interest payments of less than 2% for additional federal government spending in 2010.

With our nation falling apart, and with high unemployment and a massive drop in aggregate demand, we can affordably put people to work on public works projects rebuilding our roads, bridges, wastewater treatment systems, rail lines, schools, national parks and electrical grid. The government can lend money to the states and put people to work if the banksters refuse to do so.

IANAE (i am not an economist) but...
The tax rate back after WWII I think had less to do with the rebound and much more to do with the massive investment in infrastructure projects undertaken. Bridges, roads, rail, the list goes on and on.

These things put *massive* amounts of money into the economy through the hands of the working class who are far more likely to spend than anything given via tax cuts. That and because so much spending was happening, a lot of people started moving up in economic class and had more money to spend in a growing economy.

So spending does and always will create benefits. Tax cuts *can* help, but when everybody is running scared, people just sit on the money rather than spend it.

That's Boehner's problem: with an absolute stance against increasing taxes, and the fact (which he appears to concede by his continual refusal to answer Gregory's question) that tax cuts from present levels do not pay for themselves, spending cuts would have to be severe to have any substantial effect on the deficit--and severe spending cuts would be extremely unpopular going into this election where Republicans have the advantage. Adding the extension of all the Bush tax cuts would require offsetting spending cuts that were truly draconian.

But instead of engaging in a real discussion about responsible governance, it's easier to ignore hard questions and promise voters the usual free lunch to win an election. It may make for good politics, but it's hardly a model for good governance. In fact, it's a model for fiscal disaster.

Both parties play this game to some extent, but at least Democrats made an attempt to pay for health care reform (and succeeded according to the CBO, which both parties chose as a neutral arbiter).

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